Accounting Bellwork
3rd Hour: What goes in the
post reference column of the
following:
1. General ledger
2. General journal
3. General ledger with a
balance brought forward
Susan Rucker
March 16, 2016
Bellwork
1. General ledger
•
G for general journal and the page # of the
journal.
2. General journal
•
The account # of the ledger entry.
3. General ledger with a balance brought
forward
•
A checkmark
Section 3 Preparing a Trial
Balance
What You’ll Learn
 The purpose of a trial balance.
 How to prepare a trial balance.
 How to identify and locate trial
balance errors.
Section 3 Preparing a Trial Balance (con’t.)
Why It’s Important
To present accurate financial
statements, the accounts must be in
balance. The purpose of a trial balance
is to prove that the general ledger is in
balance.
Key Terms
 proving the ledger  slide error
 trial balance
 transposition error
 correcting entry
Section 3 Preparing a Trial Balance (con’t.)
The Fifth Step in the Accounting
Cycle: The Trial Balance
 Adding all the debit and credit balances,
then comparing the two totals to see
whether they are equal is call proving the
ledger.
 A formal way to prove that debits equal
credits is to prepare a trial balance.
 Prepared on two-column accounting
stationery.
 Account numbers are listed in the far left
column.
Section 3 Preparing a Trial Balance (con’t.)
The Fifth Step in the Accounting Cycle: The Trial
Balance (con’t.)
 Account names are listed in the
next column.
 Debit balances are entered in the
first amount column.
 Credit balances are entered in the
second amount column.
Section 3 Preparing a Trial Balance (con’t.)
The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.)
Who
What
When
Section 3 Preparing a Trial Balance (con’t.)
Finding Errors
1.
Add the debit and credit columns again.
There may be an adding error.
2.
If the difference between columns is 10,
100, or 1000 and so on, you probably
made an addition error.
3.
If the amount you are out of balance is
evenly divisible by 9, you may have a
transposition error or a slide error.
Section 3 Preparing a Trial Balance (con’t.)
Finding Errors cont.
 Transposition Error:
 Occurs when two digits within
an amount are accidentally
reversed, or transposed.
 ie. The amount $325 may have
been written as $352.
Section 3 Preparing a Trial Balance (con’t.)
Finding Errors cont.
 Slide Error:
 Occurs when a decimal point is
moved by mistake.
 ie. The amount $1800 is
written as $180 or $18,000.
Section 3 Preparing a Trial Balance (con’t.)
Correcting Entries
 There are three types of errors:
1. Error in a journal entry that is
not posted.
2. Error in posting to the ledger
when the journal entry is
correct.
3. Error in a journal entry that is
posted.
Section 3 Preparing a Trial Balance (con’t.)
Correcting Entries cont.
 When an error in a journal entry is
discovered
after posting, make a
correcting entry to fix the error.
Section 3 Preparing a Trial Balance (con’t.)
Finding Errors cont.
4. Make sure that you have included
all of the general ledger accounts
in the trial balance.
5. Make sure the amounts are
recorded in the correct column.
6. You may have an error in the ledger.
7. Check the general ledger to verify
the correct amounts are posted
from the journal entries.
Demonstration Problems
7-4 through 7-6
Problem 7-4
DeMaria’s Service Center
Trial Balance
December 31, 20-101
105
110
115
201
205
301
302
303
401
501
505
Cash in Bank
Accounts Receivable – Kevin White
Office Equipment
Store Equipment
Accounts Payable – King Suppliers
Accounts Payable – Mancuso Company
Donna DeMaria, Capital
Donna DeMaria, Withdrawals
Income Summary
Professional Fees
Miscellaneous Expense
Rent Expense
TOTAL
2000-150-270-600-140-100-2500-700--40-300-4060--
-1320-4060--
Problem 7-5
The difference is $90.00
What types of errors might have occured?
TOTAL
Most likely types
of errors are
transposition and
slider errors
(since difference is
divisible by 9)
Other types of errors
include omitting an
account, making an
addition or subtraction
error, or incorrectly
debiting or crediting
records.
12,695--12,605--
2003
Apr. 15 Office Supplies
Store Supplies
Memorandum 32
15 Correcting Entry G10
15 Correcting Entry G10
106
107
200--
200-200--
275--
200--
300--
Section 3 Preparing a Trial Balance (con’t.)
Check Your Understanding p170
Thinking Critically 1&2
Problems 7-3 and 7-4